30 October 2014

Payments and Architecture

Anand Sundaresan - Wipro Consulting Services

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My thoughts on Digital and Branchless banking

21 July 2014  |  1855 views  |  0

 

Going Digital is not just about mobility or mobile banking. There needs to be a pragmatic view of the full end-to-end banking process from initiation to settlement and confirmation where the benefits of going digital are fully realised. Most banking processes are not just limited to Forms screening, KYC and AML, there is often the need to enable full automation and STP which is what banks have been striving for many years to achieve with their backend engines, channels and browsers involved also with recent advances in an orchestration. Just enabling the process of initial checks and payment origination on a mobility app cannot be viewed as digital enablement in my opinion. More often mobile payments enabled on smart devices are being confused with digital banking.

Yet another use of going digital is attributed to the so called branch less banking. There is an assumption that everyone who have been visiting branches over the years are now suddenly going to be using the smartphones to fulfill their true function, this cannot just be a big bang change. There should ideally be an incremental transformation with technology maturing enough to enable true STP from a digital device much in the same way that the browser based applications with backend engines and accounting systems supporting them have evolved over the years. Majority of the people using smartphones and mobile apps today in their daily life may still find it a bit easier to use these digital enabled devices. But what of the major populace for whom the knowledge is just restricted to facebook, youtube and internet browsing. These people may not know how to interpret responses from banking applications far more be able to recognize what they mean. The error messages need to be intelligent and support the customer who is a layman. The error messages from the backend systems must be made customer friendly and succinctly delivered on these small screen smart devices. Error occurrence and handling of errors have put a load on technical support as well as customer support and can make the mobile app heavy. There is also the need for an advanced level of technical support to support digital enabled devices, an advantage that the thin client browsers have enjoyed with application servers servicing them and acting as middlemen as they do today. Are we then simply moving staff from branch to customer support. This is something that needs consideration. Finally, majority of the population may not be comfortable carrying out their monetary transactions from a device or even decide to take up a certain product offered by the bank with just a few clicks. There is the need for enhanced security protecting the devices which is quite important.

Recently the change to ISA deposits this year where the ceiling has been raised was in the news. This information was posted on the bank website and most certainly would be available on the mobile device. If I need to get an ISA be it a cash or investment ISA, I am not comfortable signing up online and transferring money to it although this feature is available online. I would still want to discuss it by visiting my branch and talk it over with the bank staff and fully understand its implications before signing up to it. I may want to know the benefit of offsetting the amount for my mortgage, university fees and what not, many of such similar requirements which hitherto the bank staff have much experience when dealing with their customers on a day to day basis over the years. This sort of intelligence may not be available with the automation on a digital device. Striking the right balance in knowing what processes can be digitized, what savings can be accrued in terms of cost, ease of implementation and support, how invasive it can be with existing systems is something to ponder about.

Note: These are only the personal views of the writer and by no means represent the views of any company or an organization.

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Anand Sundaresan

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Enterprise Architect

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Wipro Consulting Services

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